Business Directories

Kuwait-Airbus deal on track despite probe

Kuwait, February 9, 2014

A parliamentary investigation into a Kuwait Airways plan to buy and lease aircraft from Airbus will not affect the deal, the state carrier's chairwoman told a local newspaper in comments published on Sunday.

Kuwait's parliament voted on Wednesday to investigate all contracts signed by state-owned Kuwait Airways, which is attempting its biggest overhaul since the 1990 Iraqi invasion.

Such parliamentary inquiries are common in Kuwait, where lawmakers in the national assembly often question large government projects and have delayed or scuppered them in the past.

Al-Anba newspaper quoted Kuwait Airways Chairwoman Rasha al-Roumi as saying the deal would be completed without being delayed.

In December the loss-making airline signed a provisional agreement with Airbus to buy 25 new aircraft in a deal worth $4.4 billion at list prices.

The order would include the purchase of 10 A350-900 and 15 medium-haul A320neo jets. The airline also aims to lease 12 aircraft from Airbus pending delivery of the new planes.

The two companies are now going over technical and legal aspects of the deal, Al-Anba said. A final contract will only be signed when an internal Kuwait Airways commission gives the green light, it added.

A Kuwait Airways spokesman was not immediately available for comment on the report.

Politics and bureaucracy have long complicated Kuwait's plans to modernise its infrastructure and compete as a Gulf financial hub.

The carrier has one of the oldest fleets in the Middle East and wants to take out of service 11 jets from its fleet of 17, in which the planes' average age is 18 years.-Reuters